Ruffled feathers

A long-simmering dispute between the city of Boulder and a local nonprofit group over the ownership of the Boulder Creek Festival is threatening to boil over.

The city of Boulder is expected to seek bids for the management of the Memorial Day weekend event, but Boulder Creek Events, the organization that has run the festival for a dozen years, is questioning the city’s motivation and legal authority to do so. The nonprofit claims ownership of the event and its name. Boulder Creek Events officials say they have been singled out by city staff for years, possibly in an effort to drive them out, and they are fed up.

City officials, on the other hand, say they are not requesting bids for management of the festival in an effort to get rid of Boulder Creek Events. They laud the job that the organization has done over the years. But they do maintain that the city owns the event and must perform due diligence every few years by inviting bids to ensure that it is getting the best bang for its taxpayer buck.

Both sides produce documentation they say proves their ownership of the festival and its name, and the matter may well end up in court.

In the end, the future of an event that has grown immensely popular over the years may depend largely on its past.

Troubled history

The roots of the creek festival date back to 1984, when there was an event held to clean up areas along Boulder Creek. It received seed money from the Parks and Recreation Foundation, an entity created to support the city’s parks and recreation department. Officials say the foundation’s board consisted of the members of the city’s parks and recreation advisory group, who were appointed by city council.

According to a March 2009 memo in which the city asserted ownership of the event, the first festival was held in 1987, but by the mid-1990s, it had outgrown the city’s parks and recreation department, and a group called Boulder Community Celebrations (BCC) was created to take over management of the festival. BCC was a legally independent nonprofit that consisted of community members, festival volunteers and participants, the memo says. But after managing the event for about two years, BCC had incurred a significant amount of debt and had to be dissolved.

By all accounts, that’s when Chris Dailey stepped up. Dailey started out volunteering for the event and worked his way up to management positions. And in 1997, when the festival was in peril, he and his brother Nick agreed to take over the event’s management — and debt — from BCC. They formed an event production group called TeamFest, which later became Boulder Creek Events.

An Oct. 8, 1997, agreement shows that the deal included transferring all assets of the Boulder Creek Festival from BCC to the Daileys.

Dailey, now CEO of Boulder Creek Events, says that agreement transferred ownership of the event and its name to his organization. He has a letter from then-BCC board President Art Simmons affirming that an application was filed with the state in 1997 to trademark the name of the festival and that the assets transferred to the Daileys that year included all trademarks.

But the city counters in its March 2009 memo that the agreement does not list the festival itself among the assets transferred.

Dailey says that as part of the 1997 deal, in addition to taking on about $50,000 in festival debt, he agreed to send 25 percent of profits to the Parks and Recreation Foundation. In addition, the Daileys agreed to give the city the annual Great Rubber Duck Race, which is held the same weekend as part of the festival and benefits EXPAND (Exciting Programs, Adventures and New Dimensions), a city program that helps people with disabilities improve their recreation and leisure skills, to give them a better quality of life. The event generates $22,000 to $30,000 for the program each year, officials say.

Also, as part of the original deal, the city agreed to pay the Daileys an annual salary of up to $65,000.

City trademarks name

But a few years ago, Dailey says, city officials filed at the federal level to trademark the name of the festival. In addition, he says, about five years ago, after the festival had gained significant popularity, the city’s contracts for Boulder Creek Events to run the festival began to include language asserting city ownership of the event.

Boulder Creek Events officials say they suddenly had to start paying sales tax on beverage sales, and they were subjected to a city audit. They say they feel singled out, all the way down to special fence-height requirements that the city was enforcing for the festival but not other events.

In 2004-05, the city put the management of the 2006 festival out for bid, and among the entities challenging Boulder Creek Events for the contract was Downtown Boulder Inc. Boulder Creek Events officials say they won the contract hands down and that there were even discussions with the city about settling the ownership question by turning the festival over to Boulder Creek Events in its entirety.

But that never happened, and in a proposal to the city advocating for Boulder Creek Events to become sole owner of the festival, the nonprofit admitted that it did not own the event.

“At the present time, the Boulder Creek Festival is owned by the City of Boulder and is produced by Boulder Creek Events,” the group’s officials wrote to the city manager in November 2005. “However, it is our contention that a change in ownership will be in the best interest of both the City of Boulder and Boulder Creek Events.”

That first sentence, according to city officials, is the smoking gun that proves the festival is owned by the city, not Boulder Creek Events. Dailey says that document was prepared with the understanding that the signed contracts had begun to include language about the city’s ownership of the event, and that such an admission was needed to secure ownership for Boulder Creek Events.

“We were tricked into this and did it under duress,” he says.

Dailey
counters the city’s claim of ownership by producing the first page of a
1998 city license describing Dailey’s group as “doing business as
Boulder Creek Festival.”

Mock’s take

Former
Boulder City Council member Don Mock is what you might call a key
witness. Dailey says Mock was involved in the 1997 discussions that
resulted in Dailey taking over the festival.

Today,
Mock is president of the PLAY (Parks and Leisure for Adults and Youth)
Boulder Foundation, which is the new name of the Parks and Recreation
Foundation, the group that helped found the festival in the 1980s.

With
all of the time and effort needed to plan the festival, Mock says the
city is too late in opening up the bidding process for the 2011 event.
Dailey and his team agree, saying they are already well into the
planning process for the next festival.

For
Mock, the question is not who owns the festival, because the city can
always keep the event from occurring simply by refusing to issue a
permit for use of the public land. In fact, he says, if there is any
question of ownership, the Foundation should be in the conversation,
since it originally financed the event.

But
he says it is more a question of reaching some agreement between the
city and Dailey, like a sole-source contract for Boulder Creek Events
that includes a back-up plan if Dailey were to, say, drop dead of a
heart attack. (A 1997 contract between the city and Dailey’s TeamFest
says that if the nonprofit were to dissolve, then its assets would go to
the Parks and Recreation Foundation.)

Mock says Dailey should be allowed to continue running it, since he was the one who bailed it out in 1997.

“He
built it back up into a very strong and viable festival again,” Mock
says. “I think Chris Dailey deserves it because he was the only one who
lifted a finger to save it.”

Mock
says “no one even talked about the term ‘ownership’” when he and Dailey
were involved in the transition to BCC and, a couple of years later, to
TeamFest.

“No one
started using the term ‘ownership’ until about 2005, when the city
started using it and Chris Dailey said, ‘Wait a minute,’” Mock says,
adding that at the same time, the city stopped listing the PLAY Boulder
Foundation as a beneficiary of the event.

Mock
says city officials have been more tuned into public event ownership
ever since they caught heat for giving away three Boulder running
events, including the city’s Pearl Street Mile. According to media
reports, some said the recipient, Barry Siff, made money off public
assets when he included the rights to the races when he sold his racing
company in 2009.

Mock
sympathizes with Dailey’s desire to have some stability, to avoid
looking over his shoulder to see who is gunning for his event.

“He doesn’t want to live year to year, wondering if it’s going to be taken away from him,” Mock says.

At
the same time, he adds, the city feels responsibility for the event and
is obligated to make sure it is being fiscally accountable by issuing a
request for proposals.

“I
symphathize with both sides,” he says. “I don’t think it’s in anyone’s
interest for this to blow up and leave a sour taste in their mouths.”

As
for the Boulder Creek Events claim that there may be pressures afoot to
oust them from their managerial capacity, Mock says, “I haven’t heard
of any outside pressure.”

Sean
Maher, executive director of Downtown Boulder, Inc. (DBI), told Boulder
Weekly that he had no idea the city was issuing a request for proposals
(RFP) for management of the Boulder Creek Festival, and that he’s not
sure whether DBI would submit a bid for the event or not.

No unhappiness

Kirk
Kincannon, the city’s parks and recreation director, says the RFP is
being issued simply because the Boulder Creek Events contract is
expiring. There is no ouster under way, he says, adding that the RFP is
simply a way for the city to make sure it is getting “the best bang for
your buck.”

“Chris
has done an admirable job running the event,” Kincannon says. “I don’t
think there’s any unhappiness based on what’s being provided. We’re just
trying to see what we can do to enhance it, relative to green
technology.”

He
says that in the forthcoming RFP, there will be an emphasis on
decreasing the carbon footprint of the event, through efforts like
encouraging people to ride their bikes or take the bus to the festival
instead of drive.

Kincannon confirmed that the city has a federal trademark for the festival’s name.

“The
city’s position is that we do own the name of the event, and that
promoters have been doing it on behalf of the city,” he says.

Asked
about the 1997 agreement in which the BCC’s assets, including
trademarks, were handed over to the Daileys, Kincannon replies, “That’s a
good question. The city’s position is they have always owned the
festival and the name.”

But he adds that there is no desire to get rid of Boulder Creek Events.

“I
don’t think there’s anyone coming in, trying to take it over,”
Kincannon says. “It’s just good practice to make sure we’re getting the
best deal for the city. … It’s good to seek different ideas and do due
diligence. It’s nothing against the existing promoter.”

Kincannon
says the city plans to pick an event management firm by December,
allowing “just enough time” for that group to plan the 2011 festival.
But city spokesperson Patrick Von Keyserling told Boulder Weekly it is
still unclear whether the RFP will be issued for the 2011 festival or the 2012 festival.

Chris
Dropinski, who was the city’s parks and recreation director when the
event was transferred to Dailey in 1997, says she was not involved in
the negotiations after the original transfer from the city to BCC, and
that she doesn’t recall the details. Other city officials involved in
negotiations regarding the festival over the past decade were not
available for comment.

Grease stains

Dailey
says that grease stains left on the ground by vendors after the 2010
event may be a lingering issue, since the city complained about it and
slapped Boulder Creek Events with a hefty cleanup tab, even though he
says his crew returned to clean it up. The matter went to arbitration.

“The
day after the Boulder Creek Festival is the cleanest that park is all
year long,” Dailey says of his track record on picking up after the
event.

City Council
member Lisa Morzel says she heard about grease stains left after last
year’s festival, but that should not warrant issuing an RFP.

“I
think Chris does an amazing job of getting things cleaned up,” she
says, adding that it is unfair to Dailey to wait until just a month or
two before the festival to get a contract signed, which is what happened
in 2009.

Morzel
says Dailey’s contract should simply be renewed unless there are
problems. “It comes up every year, and I just don’t know what is the
point. … They have turned what was a failing venture into what is a very
successful venture. They generate a lot of revenue for the city each
year.

“If there’s
some kind of problem, then tell me what it is,” she adds. “I don’t know
why staff are interjecting themselves into it. Maybe it needs to come to
council.”

In
response to a request for comment, the city attorney’s office issued the
following statement: “The city’s position is that the city owns the
event and all the rights that flow from that ownership. Regardless of
any state trademark filings, Mr. Dailey is and has always been a
licensee of the city, his use of the mark inures to the city’s benefit,
and has no independent rights in the mark. State trademark filings
convey no rights, and they don’t carry any evidentiary presumptions like
federal trademarks do.”

When
asked why the city applied for a federal trademark several years ago,
the written response from the city attorney’s office was, “It is the
city’s practice to protect all of its assets.”

In
response to a question about the transfer of trademarks from BCC to
Dailey in 1997, the city attorney’s office replied, “The city was not a
party to the agreement between Boulder Community Celebrations and Mr.
Dailey, therefore, we cannot confirm the validity of that agreement.”

“We’re not going to lay down,” Dailey says. “We’ll take them to court if we have to. We’ve let them push us around too long.”